Yet another secret sugar report

[posted 23 Aug 2010,1515]

It seems the State has commissioned yet another report on the sugar industry which is to be kept secret from the public.

The report/review commissioned by the interim government and reportedly paid for by the Fiji Sugar Corporation, was done by the auditing firm of Deloitte and Touche LLP.

We are reliably informed that the report is now with the Sugar Ministry. The entire report is not to be made public. Industry stakeholders will only receive parts of the report relating to their own section.

This is ridiculous. What is there to hide? The complete report should be made public and made available to all stakeholders including growers’ representatives.

This is the second such report commissioned by the interim government. The first completed in December 2008, was carried out by a team of Australian ‘expatriate’ consultants led by former FSC chief executive Rasheed Ali.

The report was kept secret, not made available even to industry stakeholders, but government acted widely on its recommendations for so-called reforms which saw the dissolution of key industry institutions such as the Sugar Commission of Fiji, the Fiji Sugar Marketing Ltd and the Sugar Cane Growers Council and the marginalisation of cane growers from the industry.

NFU’s message to the government is that no number of reports - and there has been many over the years - will make any difference if growers continue to be marginalised in an industry in which they have a 70% stake.

The sugar industry can only survive if we go back to resolving industry problems through the consultative process that existed under the 1984 Sugar Industry Act. Not by imposing on the growers.

What ails the sugar industry currently, is FSC’s failure to run its mills efficiently and extract optimum sugar from cane supplied to the mills.

Declining cane supply and the land problem are chronic ills but there is little point in increasing yield if cane supplied to the mills are to be wasted through milling problems.

It is taking at least 14 tonnes of cane to make a tonne of sugar at the Lautoka, Penang and Labasa Mills. The Rarawai Mill is taking 21 tonnes of cane to make a tonne of sugar.

The situation is expected to worsen further into the season as the sweetness of cane declines. We envisage a sugar make of only 120,000 tonnes from 1.9 million tonnes of cane, based on the disastrous performance of the mills. But even this may be in doubt considering the crippling drought that is affecting the cane belt.

Compare this with FSC chief executive Deo Saran’s optimism at the start of the 2010 season: he predicted 190,000 tonnes of sugar this year from 2 million tonnes of cane on an average TCTS of 10.5:1.

Three months into the season, according to NFU sources, FSC has only made about 41,000 tonnes of sugar from a total of 693,328 tonnes of cane supplied to all four mills. This works out at an average shocking TCTS of 17:1.

Last year (2009 season), about 40% of all cane delivered to the FSC mills, were wasted because of very poor extraction rates due to milling problems. Farmers had delivered 2.25 million tonnes of cane to the mills. This should have produced 250,000 tonnes of sugar based on a TCTS ratio of 9:1.

Instead, only 165,000 tonnes of sugar was produced at an average TCTS of 13.48:1. The loss to the sugar industry was enormous, estimated at about $100 million.

Improving the performance of the four sugar mills, should be the first pre-requisite to any attempts to reviving the sugar industry.